Last year, JPMorgan Chase decided to exit the Canadian consumer credit card market. This week, Chase closed the books on all outstanding balances by forgiving the debts. Is this the financial-services equivalent of Merck developing and giving away its river-blindness drug, or is something else at work here? >>>
LINK: ‘It’s crazy’: Chase Bank forgiving all debt owed by its Canadian credit card customers (by Sophia Harris for CBC News)
U.S.-based Chase Bank is forgiving all outstanding debt owed by users of its two Canadian credit cards: the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa. The bank retired both cards last year and said it’s wiping out cardholders’ debt to complete its exit from the Canadian credit card market.
Affected customers can’t believe their luck.
Credit card rewards expert Patrick Sojka said Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada.
“They’re still probably paying taxes, paying accountants, and for them, they just probably worked it out and [said], ‘Let’s just forgive the debt and fully get out of the country.'”
But he’s stumped as to why the bank didn’t instead opt to sell the debt to a third-party debt collector, which would allow Chase to recoup some cash.
Chase told CBC News it chose the debt-forgiveness route so that everyone benefited.
“Ultimately, we felt it was a better decision for all parties, particularly our customers,” spokesperson Maria Martinez said in an email.
What do you think?